Watch for this Canadian Clean-Tech IPO From the Lab Bench at Queen’s University

WT Interview with Howie Honeyman, Ph.D. CEO and President of Forward Water Technologies (pending FWTS/TSX)

Q&A

WT: I have with me today Dr. Howie Honeyman from Forward Water Technologies, thanks for doing this.

Honeyman: I’m happy to be here.

WT: I want to separate this interview into two parts, the first part is explaining Forward Water Technologies and the second part is the path you have taken so far to get here today. Can you tell me about your Forward Water Technologies and what’s great about it?

Honeyman: Forward Water was founded around a technology that came out of an accelerator I participate in, at Queen’s University.

we recognized that the technology had the ability to extract clean water out of extraordinarily salty solutions, and it would do that on spontaneous low energy input.

So, we realized at the time that this could be applied to wastewater, and in particular, wastewater that is (presently) burned, buried, or boiled. That is, wastewater that so contaminated that you would have to boil it, bury it - by putting it down a deep well disposal, or in some cases incinerate it; all those take massive amounts of energy and produce a lot of greenhouse gases (GHG’s). We realized that the technology we had in hand, that we were looking at in the laboratory, we could have the same result but with only a fraction of the energy.

We took the technology and we spent time moving it into an engineering environment, where we could get credible, full-scale assessments of the technology, and demonstrate to what I call the skeptical engineering community that the technology can in fact be cost favourable, low energy and treat wastewater that is “burn, bury or boil” today.

WT: One of the principal markets I saw, according to the website, is that this could be a major breakthrough in desalination processes. Is that accurate?

Honeyman: If you are talking about desalination of high-strength brine concentrate, the answer is yes. If we are talking about the desalination of seawater for potable purposes, the answer is a little different. It turns out that the technology we have in hand is so capable of treating very high-strength brines, that seawater is not a good starting point. However, if you thought about seawater desalination being accomplished by reverse osmosis, one of the things people who do this on a large scale struggle with, is the reverse osmosis reject brine, that is, the concentrated salt solution that is basically a waste product of the RO process itself.

We can actually treat (the RO) reject stream and extract 75% of the volume as clean, potable freshwater. And then you’ve got such a concentrated reject from our process, that you can deal with that using simple evaporation process. So, we have a possibility of augmenting, furthering, and enhancing the current seawater desalination processes, at a time when our technology is a stand-alone at industrial waste stream.

WT: If I understand correctly, there are really two markets: oil and gas, and desalination of seawater; I would imagine this has huge potential for irrigation of arid lands, is that also where you are going with this?

Honeyman: Yes, so that is one of the end-uses for clean water we extract, we can reach potable levels of treatment, but there is also the potential to take extracted water from our process, the clean water outlet stream and send it to secondary uses such as agricultural purposes and potentially industrial re-use as well. That’s where we are positioning the technology, at the current scale, it is industrial re-use and secondary use.

WT: This is now a finished technology, it’s up and running and for sale, is that accurate?
Honeyman: Something you have to struggle with, in emerging technology for water treatment is that you are really communicating with what I call the skeptical engineering community. This is the community that has been constantly promised the world with new technologies. To convince this community that what you have done will work, you have to prove it works at scale.

We have been able to show this technology works at 50,000L per day plant capacity, easily scalable beyond that, and we have completed that.
Now we are placing the technology as completed plant in industrial sites, and that is really at the end of the commercialization pathway, is where we are.

WT: A fair number of our readers/viewers would be, no kidding, in the water industry, and the sphere of water sciences. If you could, explain the process you have gone through, to get from a lab bench at Queen’s University to now, your company Forward Water Technologies is going on the TSX? I am really keen to show water entrepreneurs, especially Canadian water entrepreneurs, how this is done, what the process was, what they need to pay attention to, pitfalls, tips if you could?

Honeyman: (chuckles) If I had the magic formula, I would be happy to share it!

I think it’s a process of what I have learned along the way, both mistakes and successes. I think you’ve got two things you need to consider, are you a treatment technology or are you a measurement or sensor technology? I think the sensor technology is really smart, it does serve a need, it’s really important that you know how you are handling your water. But we are part of the community of technologies that actually moves molecules, to treat the water streams, which is capital intensive, requires equipment, and needs to be done at scale.

So, when you take that perspective, what do you need to do?

What you really need to do is get the technology: people don’t buy bench chemistry, they buy industrial process solutions. You really need to show how your technology works at scale, how it integrates as a component, or possibly stand-alone solution for an end client, that’s the real challenge.

What I’ve had to do is scrape together the financial support both from private investors and governments support and leverage all of that, up to proving I can do this at full scale. What is critical to doing that is bringing in some talented engineering people, who have been able to show that they can move stuff from a small scale to a large scale, focus on that as a first step. It’s a difficult first step, it requires a lot of capital investment, that is the challenge, show the tech works in an engineering environment as opposed to a laboratory environment.

WT: I read with interest the public record, notes of record at TSX. What it looks like to me is, “Okay, this might work”, the Queen’s lab test might work, then it went to an accelerator where services are shared, puppy companies are formed, alliances made. A lot of our viewers will have gone to that stage, so what you are saying is, to get out of the accelerator “we’re small” thing, you had to go to private investment, and sell them that this could be scaled up, then they put money down, and then you are going on the TSX. I’m trying to figure out the process between convincing venture guys to get in on this and raise the money for real-time trials and scalable trials to the TSX. Can you speak about how that works?

Honeyman: It’s been an interesting journey, and this is not our first attempt. So why did we transition from the private world to the public world?
The answer is, we found private investors that are mission-based, motivated not only by the commercial potential of the investment but also the social impact, that was their motivation. That family office, if you will, became our major supporter, as well as some other industrial emission-based investors as well, and that allowed us to bring in a bunch of government funding.

I want to make this very distinct:
We were unsuccessful at penetrating venture interests. The venture market simply isn’t there for these types of capital clean-tech kinds of companies, right now, it doesn’t fit their model. Not that this isn’t a favourable business, it just didn’t fit what their clients are expecting, what their capital partners are expecting.
So after we moved through this, call it “the motivated investor group”, we needed to bring in more capital, so we turned to the public markets. The public markets today are really motivated by, today, there is a great interest in impact investing, as well as the commercial success.

That story that we have, between the commercial success and commercial opportunity, combined with the ability to show that you are actually making a difference on the sustainability front, really allowed us to generate a pre-IPO revenue-raise that is going to give us the resource backing that we need to get to our goal, to our commercial phase.

So, it was really a little bit of reading who our investor market was, and really trying to know our clients, and it wasn’t the venture capital groups, it turned out it was the public market. That took some learning. A lot of “no’s” from a lot of venture groups, and then a lot of scratching our heads, wondering how are we going to get capital for this, and we then started looking at the public markets, that made a lot of sense. We followed through with a reverse takeover, that allows you to get into the TSX, our story with investors rang really well. We were able to raise the target amount of revenue that we needed to launch the company.

WT: This is definitely a feel-good story, especially given the rough part of getting through a pandemic. Can I follow up in a few months about how did the whole public offering go, how are your sales now, would that be acceptable?

Honeyman: I would be thrilled with that, a little check-in. We are listing in the next week, at least when all the paperwork is finalized, if anyone is interested, under the ticker FWTC.

WT: I’m going to push the FWTC story out, as well as see what can be done with our viewership. Thanks for doing this.

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